Chapter 7: Capacity to Contract

Page 145 Alena Jake Arkadi Mr. Barenblatt

What is the age of majority in NYS? What is regulated by age in NYS? Research

Why do we regulate by age?

Minor- (minority, infancy) a person who has not yet reached the age of legal adulthood, usually referred to as the age of majority.

The age of majority is 18 yrs in most states (since 1972 when voting age was lowered to 18). Purchase alcohol is 21 years.

Teens reach the age of majority the day before their 18th birthday.

Contract of minors Voidable Contracts Minors have the right to disaffirm (avoid, not bound by) their contracts if they so choose. Privilege protects the minor so they won’t be taken advantage of or make a poor decision

Minors may disaffirm a contract even if the item is damaged or destroyed; However, the amount can be deducted for damaged items. Young people also have a reasonable time after reaching majority to disaffirm their contracts

Do Now: Copy notes below: If a minor still has merchandise received upon entering a contract, that merchandise must be returned when the contract is disaffirmed. Objective: Students will examine how fraudulent contracts involving minors are not voidable.

A minor who claims to be over the age of majority has committed fraud. In some states, a minor who lies about his/her age can be sued (but there must be an actual loss)

In most states, it is a criminal offense to lie about one’s age to buy alcohol.

Adult caught buying beer for minors http://www.youtube.com/watch?v=RmrIZKhEF6g&feature=related

Fake Id

What are the laws? Use the internet to research the following What are the consequences of… Using a fake id to purchase alcohol in NYS? Hosting a party for underage drinking in NYS? Purchasing alcohol for a minor? Giving someone your id?

A minor may not affirm some parts of a contract that are favorable and disaffirm the unfavorable parts. Minors entering into contracts with other minors have the right to avoid the contracts.

A person may ratify (approve) contracts made during minority only after reaching majority. Ratification may be accomplished orally, in writing, or by one’s actions; such as using the items purchased after reaching majority, selling the items, making an installment payment, keeping the items for a reasonable time after reaching majority.

Contracts for Necessaries Minors are responsible for the fair value of necessaries. Necessaries include food, clothing, shelter and medical care. (Otherwise adults would not want to enter into contracts with minors)

Under common law, one’s “station in life” has a bearing on whether an item is a necessary. Many states have given minors the capacity to enter into contracts for life or car insurance

Other Contractual Capacity Rules Mentally Impaired Persons are considered unable to make sound judgments. Guardians- a person who looks after the affairs of an incompetent person.

Before a guardian is appointed, a mentally impaired person’s contract is voidable. After a guardian is appointed and person has been declared insane, the contracts are void.

Intoxicated Persons A person who enters into a contract while intoxicated may disaffirm the contract. Intoxicated persons, like minors and the mentally impaired, are responsible for the fair value of necessaries.

Aliens - A person who is living in this country but owes allegiance to another country. Aliens are limited in their capacity to contract during times of war.

Professor Emerson: Contractual capacity http://www.youtube.com/watch?v=dTTT6EJWkTk&feature=related http://www.youtube.com/watch?v=xw_w3TFJwWM